WASHINGTON — President-elect Barack Obama plans to support unprofitable U.S. ethanol producers and pursue the same policies that failed President Bush.
Obama, a Democratic senator from Illinois, the second-biggest corn-growing state, will maintain Bush’s goal requiring fuel producers to use at least 36 billion gallons of bio fuels in 2022, said Heather Zichal, the campaign’s senior energy adviser.
The ethanol industry, which loses about 66 cents a gallon at current prices, will receive at least as much support as from the current administration, including tax credits to spur consumption, she said.
“Obama recognizes how important the renewable and biofuels industry is to creating jobs and meeting our goal of reducing dependence on foreign oil,” Zichal said in a Nov. 3 interview. “He’s fully committed to it and sees tremendous value in the renewable-fuels standard and continuing down this path.”
Ethanol makers are collapsing after wrong-way bets on corn prices overwhelmed $20 billion in federal aid and government-guaranteed demand for the fuel additive. VeraSun Energy, the No. 2 producer, filed for Chapter 11 bankruptcy protection Oct. 31.
Bush’s approach has been criticized for hurting the environment, increasing global food prices and contributing to riots from Haiti to Egypt. Earlier this year, at least 51 members of his own party, led by Texas Gov. Rick Perry, called for relaxing the policy.
Obama, 47, plans to spend $150 billion over 10 years to develop renewable fuels and require at least 60 billion gallons of advanced biofuels be produced by 2030. Bush’s Energy Independence and Security Act, passed in December, called for ethanol production to more than double to 15 billion gallons in 2015 from 6.5 billion last year.
Biofuel Energy, based in Denver, said in August that it didn’t have enough money to cover $46 million in losses on contracts for corn, ethanol and the natural gas used to run its distilleries. The company locked in third- and fourth-quarter corn costs of $7.01 and $6.90 a bushel, respectively. Corn plunged to about $4 a bushel for December delivery on the Chicago Board of Trade.
